“Back in December, I wrote that this Brazilian energy giant Petrobras had the potential to reach a total market capitalization of $1 trillion. The stock is up a modest 4% since then and still possesses what I think is huge potential for shareholder gains in the coming years.

For starters, its track record of value creation is there. In the past decade, average sales have been up about 17% annually, while annual earnings have advanced at an even higher rate, close to 23%. This has pushed sales up from less than $23 billion in 2010 to more than $140 billion in 2011. For the coming year, analysts expect another solid increase to $150 billion and earnings per share (EPS) of roughly $3.30, an incredible increase from only about $0.50 a decade ago.

Another decade of similar growth — and who knows — sales could approach $1 trillion. This is quite possible because Petrobras plans to spend more than $224 billion in the next five years to explore for oil and gas in presalt reservoirs off the Brazilian coast. The current price-to-sales multiple for this stock is 1.34, which, if sustained, would push Petrobras’ market cap well past the $1 trillion point.”